15 October 2012 | By Joanne Harris
Scandinavian firms are showing the way and making the most of their jurisdictions’ relatively benign macroeconomic environment
Despite a slowdown in M&A work, firms in Denmark, Norway and Sweden are flourishing as their economies continue to do well. All the shortlisted entries for this year’s Nordic Firm of the Year at the European Awards are in a strong position for the future.
The seven firms that make up the shortlist for Nordic Firm of the Year at The Lawyer’s European Awards this year have two things in common - they are all based in Denmark, Norway or Sweden and all recorded significant turnover growth last year.
While much of the rest of Europe suffered, Scandinavian firms enjoyed strong and, in some cases, record years. The lowest turnover growth among the shortlisted firms was 7 per cent, while MAQS recorded a massive 23 per cent revenue expansion in 2011 in its Danish and Swedish offices.
The firms all benefited from strong local currencies and reasonable transactional environments, while litigation also performed well. This year, while corporate activity is slow across the region, due partly to strong local currencies inhibiting overseas investment, that is being compensated for by good business in other areas.
Several firms are focusing on beefing up their litigation teams and, although Scandinavia has been largely immune from the banking crisis affecting the rest of Europe, there is diversification and the development of new markets.
The current year should be another solid one for this focused and energetic group of firms, which European Awards judges picked out as being a particularly strong category.
The winner will be revealed at the awards ceremony in Monte Carlo on 25 October.
Magnusson was last year’s Nordic firm of the year, winning with a strategy of growing not only across Scandinavia but also the Baltics. The firm has continued this growth and 2011 was an even better year than 2010, with year-on-year growth of 16 per cent compared with 6 per cent the previous year. While it is small compared with its rivals - with just 110 lawyers and turnover of €13.5m - Magnusson’s ambition is impressive. The firm has opened three new offices in 2012, financially integrating all its bases with existing ones.
The firm has also been hiring extensively, picking up partners from senior in-house positions and international firms to bolster its ranks.
Magnusson punches above its weight in terms of deals, last year winning work for the Bank of China on its expansion into Sweden and Poland, and Sony Ericsson on the sale of the 50 per stake held by Ericsson to Sony, valued at €1.05bn.
Senior partner Per Magnusson acknowledges that the firm still lacks the depth it needs to compete with many others in the region. Breadth is one thing, but Magnusson needs to grow its numbers. It plans to do so both laterally and organically. One focus will be China.
“That’s already significant, but we expect it to grow even more,” says Magnusson, who adds that the firm has good relationships with Chinese outfits but will focus on advising Chinese clients looking at investing in regions where Magnusson is present.
In terms of practice, banking and finance regulatory work is the main focus.
“That will continue to grow because there’s almost endless demand for services in that sector,” Magnusson concludes.
Scandinavia’s biggest firm produced record turnover of SEK1.3bn (€150m) in 2011 - a 7 per cent increase compared with the previous year. The year also saw the launch of a corporate compliance and investigations practice, the expansion of the firm’s Brussels environmental practice and the election of Jan Dernestan as managing partner.
Mannheimer’s corporate practice had a solid year, topping Swedish M&A tables with deals such as Facebook’s establishment in Sweden and the complex acquisition in which Skandia Liv acquired its parent, Skandia AB, from Old Mutual.
In the past few years, Mannheimer has intensified its focus on diversity issues. Half the partners promoted in the past three years have been women - an impressive figure.
Dernestan says life has been tougher for smaller firms in Sweden over the past year, but Mannheimer has had a decent year so far. While the M&A team is quiet, this is made up for by activity in the banking, corporate and commercial, and litigation practices.
“Many people say the fundamentals are in place to do the deals, but no one’s doing them,” Dernestan says of M&A.
He adds that areas such as banking are benefiting from the development of a Swedish bond market.
“We didn’t have a big bond market in Sweden because normal lending was so cheap,” he says.
The outlook for 2013, Dernestan concludes, is “cautiously positive”.
MAQS Law Firm
This year is the tenth since the formation of MAQS through a merger between firms in Denmark and Sweden. Since then, MAQS has grown to seven offices, including a presence in the Baltic States, with 225 lawyers. The offices are not financially integrated but work as one firm.
Last year was a solid one for the firm. Turnover in the Danish and Swedish offices grew by 23 per cent, with Sweden posting revenue of SEK266m (€31.4m) and Denmark DKK92m (€12.3m).
MAQS has identified life sciences as a practice area to focus on, notably in Denmark. It also plans further expansion in Sweden and is trying to increase its cross-border work to create a real pan-Nordic firm.
Last year also saw the launch of training academies for associates.
Unusually for a Nordic firm, MAQS has made several lateral hires in a range of practice areas, including property, life sciences and litigation.
Plesner is Denmark’s largest firm and, like most of its local rivals, it does not provide any turnover figures publicly. However, the firm says it had a record year last year, with revenues rising 8 per cent - in line with its peers in the region.
Plesner’s strength is in M&A work and it topped Nordic deal tables by value last year, acting on over $17bn-worth of transactions. Volume-wise, the firm picked up more deals than other Danish firms and was fifth in the region. While it has not made a large number of lateral hires, the most recent appointments have focused on corporate. In May 2011, the firm picked up Bruun Hjejle corporate partner Henrik Rossing Lønberg.
Board member and partner Finn Lernø says this focus has continued to pay off, with a surprisingly busy year in 2012 so far for corporate work.
“It would seem we have been extremely blessed in terms of new mandates, not least in M&A,” Lernø says.
Lateral hires in Denmark are uncommon, and Lernø says Plesner took the decision to make its appointments to boost numbers at partner level and create a better balance in the corporate team.
The firm is also focusing on banking and finance as distressed debt continues to generate work, and has strengthened its financial services and regulatory team.
“They have quite a lot to do, which is partly due to the increase in M&A work,” Lernø says.
The pipeline of work coming through is shorter than in the boom years, Lernø adds, “but it’s pretty good right now and some of the work has just come in. We’re pretty content just now and comfortable about the immediate future”.
The firm’s strategy for the next few years is likely to see it maintain its current focus. Lernø says Plesner plans to keep track of what its rivals are doing and the shape of the Nordic market.
“In the next few years, some really substantial pan-Nordic firms will materialise,” he predicts. “We need to be abreast of this.”
Although it is headquartered in Finland, Roschier also has a Swedish office. Turnover grew by an impressive 25 per cent between 2010/11 and 2011/12 - the firm’s year-end is 31 May - hitting €25m this year. The Stockholm office now has 70 lawyers, seven years after its establishment.
Last year, the firm rejigged its Stockholm leadership team, appointing Jens Bengtsson and Fredrik Rydin as co-heads. Stockholm office founder Axel Calissendorff is still senior partner. Three partners were hired laterally, from Vinge and Nord & Co.
The firm’s presence in Finland and Sweden has helped it to pick up work on several deals involving both jurisdictions, including CVC Capital Partners’ acquisition last year of technical products wholesaler Ahlsell and the sale of Finnish assets of Swedish company Vattenfall.
Roschier is determined to follow a “one-firm” policy and its strategic aims now focus on bringing all its offices together.
Norwegian firm Schjødt is smaller than many of its competitors, but is determined to catch up. Its 145 lawyers are spread across five offices - four in Norway and one in Brussels. Schjødt claims that no partners have left the firm in the past three years. Last year, the firm made four lateral partner hires.
Turnover in 2011 grew by 14 per cent to NOK520m (€69m), continuing a rapid upward trend. Schjødt recorded 28 per cent growth between 2009 and 2010, and for the first six months of 2012 it reported that revenues had risen 15 per cent.
The Stavanger office, open for several years now, is doing especially well on the back of oil and gas work, particularly M&A and large disputes.
Schjødt has an international outlook, with an office in Brussels and new French and Chinese desks, set up following the hire of French and Chinese lawyers. It wants to continue growing Brussels and is looking at possibly opening new offices elsewhere in the world - Houston and London have both been considered, although neither is likely to happen imminently.
The firm’s managing director, Paul Bellamy, says its international strategy began as a way of building on its large market share of foreign clients relative to the more established players in the market, who routinely used to advise the major Norwegian blue chip companies that were not Schjødt clients.
“Now that’s changing,” says Bellamy. “A very large share of our business is international. In the past couple of years the blue chip Norwegian companies have started coming along.”
Bellamy says internationalisation is built into Schjødt’s strategy, culture and way of thinking: “We recruit people who have had some of their legal education abroad.”
He adds that another aspect of the firm’s culture is paying off at present. The original Schjødt, Annæus, was a noted litigator and Bellamy believes the firm has always had a strong dispute resolution team, which is helpful in a time of slow transactional activity.
“We’re doing extremely well on the dispute resolution side, but on the transactional side, although we now top deals tables by volume, transactions are being pulled all the time,” he says.
Although the second half of 2012 is looking slower than the first, Bellamy remains confident, saying the firm has “endless projects, enormous appetite and tremendous enthusiasm”.
Like the other Nordic firms, Thommessen had a solid year, with turnover rising 7 per cent to NOK698.2m (€94.7m). Most of the firm’s power is centred in Oslo, by far the largest office, although Thommessen also has around 55 people in Bergen and a tiny representative base in London.
The stand-out case of the year for Thommessen has been litigation head Frode Elgesem’s instruction by the youth wing of Norway’s Labour Party to assist it with the aftermath of the 22 July 2011 bombing and shootings by Anders Breivik. Elgesem was one of three court-appointed lawyers chosen to co-ordinate representatives on behalf of victims and victims’ families. It was a first in Norwegian law to create the co-ordinating role.
Thommessen’s dispute resolution practice is a key part of its offering and is one of the things the firm wants to develop, having made three arbitration laterals in March this year. The other two planks of the firm’s strategy are to continue to grow fee-earner numbers and ensure the firm has a business philosophy and a clear vision.
Managing partner Kai Thøgersen says the firm is focusing on implementing that strategy, with some success already, although it is still early days.
“To get litigation partners up to speed takes some time, but as a new litigation team combined with the existing team, they are attractive to the market,” he says.
The challenge for Thommessen now is to continue integrating its new hires and making the best of the market environment.
“We’re focusing more on getting the firm organised, to understand the business and the market,” Thøgersen says.
He adds that although, as in other Scandinavian markets, the corporate scene is slow, Thommessen is on budget for a good 2012.
“It has been a little bit slow but in spite of that, we’re ahead of last year in terms of turnover,” he reveals.
GDP (current prices, US$, 2011) 332.7bn
Annual inflation (2011) 2.8 per cent
Population (third quarter 2012) 5587085
Life expectancy at birth 79.5
Unemployment rate (2011) 4.1 per cent
Source: World Bank, Statistics Denmark
GDP (current US$, 2010) 485.8bn
Annual inflation (August 2012) 0.5 per cent
Population (July 2012) 5017500
Life expectancy at birth 81
Unemployment rate (July 2012) 3 per cent
Source: World Bank, Statistics Norway
GDP (current US$, 2011) 538.1bn
Annual inflation (August 2012) 0.7 per cent
Population (July 2012) 9522998
Life expectancy at birth 81
Unemployment rate (August 2012) 7.2 per cent
Source: World Bank, Statistics Sweden